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IRS Admits Get Transcript Data Breach Three Times Larger Than First Announced

The breach of the IRS's Get Transcript system in May was much larger than first reported, the IRS admitted on Aug. 17. An additional 220,000 taxpayers had their tax return data stolen from the site, approximately tripling the number of victims to 334,000. According to the IRS, the criminals obtained enough taxpayer-specific information from outside sources that they were able to get through the Get Transcript authentication process.

In the statement, the IRS said it was "moving aggressively to protect taxpayers whose" accounts may have been compromised. It is notifying affected taxpayers and will also offer free credit monitoring services and give those taxpayers an opportunity to enroll in a special identity theft filing program in which taxpayers get confidential identity protection personal identification numbers (IP PINs) to use to file their returns. (In related news, the IRS announced that it will not assert that free identity protection services provided to victims of a data breach such as this one are taxable income to the recipients.)

The IRS shut down the online Get Transcript service when the breach was discovered, and the service is still unavailable. Transcripts are available using the Get Transcript by Mail service.

The winners of The Tax Adviser’s 2016 Best Article Award are Edward Schnee, CPA, Ph.D., and W. Eugene Seago, J.D., Ph.D., for their article, “Taxation of Worthless and Abandoned Partnership Interests.”

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